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Polymarket, a cryptocurrency-based prediction market, faces the risk of being banned by France’s regulatory authority, ANJ, due to the significant amount of predictions being made regarding the 2024 U.S. presidential elections. The global interest in prediction platforms has led to a record increase for Polymarket, with an anticipated distribution amounting to $450 million expected following a potential victory by Donald Trump.
$450 Million Expected in U.S. Election Predictions
Following Trump’s possible victory, distributions related to election predictions are expected to rise by around $450 million. While traditional polls suggest a closer race, prediction markets like Polymarket and Kalshi have recorded a sharp increase in Trump’s chances recently, indicating a significant divergence from poll-based expectations.
ANJ Considers Blocking Access to Polymarket
ANJ has pointed out that Polymarket is engaging in prediction activities not permitted in France except by licensed operators. According to local media, the regulatory body has the authority to ban access to unlicensed prediction sites, with restrictions on Polymarket expected soon.
An ANJ official stated, “Polymarket operates in a completely uncertain area, which is precisely the definition of prediction activities.”
Regulatory Concerns Over Market Manipulation
The high activity level on Polymarket has sparked speculation that the platform could be used for market manipulation. Two blockchain analytics firms, Chaos Labs and Inca Digital, have revealed potential wash trading occurring in the U.S. presidential betting market on Polymarket. Such trading can distort market signals and mislead other participants.
The U.S. Commodity Futures Trading Commission has also expressed concerns regarding prediction markets and proposed a rule aimed at tighter regulations due to their potential for manipulation. Though the outcome remains undecided, regulatory measures could impact Polymarket’s operations in other markets, particularly in the U.S.
The increase in users on the Polymarket platform has drawn attention from French authorities regarding its popularity among French residents. This situation has raised concerns about the platform’s compliance with prediction regulations in France.
If a ban is enforced, its application in France would be restricted, although users might attempt to bypass the limitations using VPN connections. ANJ may also pressure media outlets and directories to halt promotions or links to Polymarket, further constraining its audience.
The potential ban on Polymarket’s activities in France could influence the company’s operations in international markets. Users making significant predictions and expecting high rewards are drawing the attention of both local regulators and international authorities.
The banning of Polymarket in France could serve as a significant example regarding regulatory compliance and user safety for similar platforms. These developments may shape the future regulations of prediction markets and inform strategic decision-making for businesses.
